Establishing an employee ownership trust to buy out retiring owners is increasingly popular. Not only does it often solve the kinds of succession problem that many owners face, it creates a strong platform for continued success and growth through having engaged and motivated new owners and brings statutory tax reliefs for both retiring owners and employees.
A recent study found that more than third of UK SME business owners are looking to exit within a 3-5 year time-frame but for many it is difficult to find a workable way to do this. Although employee ownership is not a panacea for all situations, it can often be an attractive succession planning solution.
“Why wasn’t I aware of this before?” is a commonly asked question.
So we think an understanding of how employee ownership trusts work and the tax incentives to encourage more to be created, is important for all those who are thinking about succession or advising on succession planning.
Recent independent research back up the advantages to business of becoming employee owned, The-Ownership-Dividend
Here is a more detailed guide to becoming an employee owned company